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An example of the need for effective central staff assistance in interdepartmental management problems was pointed out by another department. For some years this department has been struggling with the matter of working out interdepartmental operating relationships in the fields of telecommunications, aviation, and shipping. While committees have been appointed to study these problems, their efforts have been effective only in matters of policy and not to any extent in working out details of administrative and procedural interrelationships. It is in this latter area where officials of the department in question feel a direct, continuing need for assistance from a central agency such as the Bureau of the Budget. In transmitting informational material to our staff an official of the Depart

ment wrote:

One important point this material reveals is the large number of agencies that are concerned with the problems in each of these specialized fields and the extent to which their divergent specialized interests give rise to divergent points of view. These conditions create that whole area of problems that are sometimes referred to as "jurisdictional issues". Part of the difficulty arises from the different responsibilities assigned to the various agencies, frequently by legislation, and part stems from the limited point of view that officials have whose careers are tied in with a single agency and who do not have the interests and opportunity or incentive to approach problems from a Governmentwide perspective.

WHAT HAS BEEN DONE

From our review of the evolutionary development of the management concept in the executive branch it must be recognized that considerable progress has occurred during the past 30 years with giant strides having been taken during the period of World War II.

The most beneficial contributions made during these 30 years were by the President's Committee on Administrative Management in 1937 and by the Commission on Organization of the Executive Branch of the Government in 1949. Of these two the former perhaps was the more beneficial from our standpoint, because it largely created the framework within which an objective pattern for businesslike management principles could be drawn and pursued.

The President's Committee pointed out the need for more effective assistance to the Chief Executive, who was becoming increasingly overburdened by day-to-day operating detail. It stressed such sound management practices as the functional realinement of many of the Government's substantive programs. It emphasized the need for decentralizing authority to the lowest practicable operating echelon provided adequate administrative controls were maintained. The report particularly emphasized the extreme need for the creation of a unit at the top executive level to assist in administrative research and other managerial activities.

In support of this proposition, the President's Committee made these points:

(1) The President needed a research agency to investigate broad problems of administrative management-problems of administrative organization, finance, coordination, and procedures and methods of work.

(2) Economy and efficiency in Government require constant investigation and reorganization of the administrative structure.

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(3) A Division of Administrative Research should be established in the Bureau of the Budget. This Division should initiate studies of its own where necessary but should also aid and encourage agencies to study their own organizational and procedural problems.

(4) Administrative research activities should be concentrated in a separate division. Personnel in the Division should be freed from the detailed routine duties involved in handling budget estimates.11

Primarily as a result of recommendations of the President's Committee on Administrative Management, the Bureau of the Budget since 1939 has assumed general responsibility for management improvement throughout the Federal Government.

In 1949 the Commission on the Organization of the Executive Branch of the Government had the opportunity to write a progress report on the Bureau's work in this area. That Commission reaffirmed the conclusions of the President's Committee on Administrative Management concerning the management responsibilities of the Bureau of the Budget. The Budget Bureau was considered by the Commission as "the President's main reliance as an instrumentality for the improvement of management and the attainment of economy and efficiency throughout the executive branch."42 Particular attention was called to the work of the Administrative Management Division as the unit within the Bureau of the Budget responsible for advising the President on overall organization and management throughout the departments and agencies.43 However, the following paragraphs in one of the task-force reports direct attention to the fact that the Administrative Management Division had not realized its full potential:

The Division of Administrative Management has done some good work during the 9 years since it was established. But this work has been done on a casual basis. No comprehensive approach looking toward organizational and management improvement has been planned or utilized by part of the Bureau's leadership that such an approach should be made. Indeed, the Division has operated largely on the theory that the work which voluntarily came to it from day to day was the important work for it to do. This seems much too fortuitous for either maximum effectiveness or accomplishment.

In promoting improved organization and methods in the governmental departments and agencies, the Division has relied almost wholly upon the voluntary adoption of its recommendations. It has not had, nor has it sought, the authority to require the application of its proposals. Whether this attitude is the best for accomplishing the desired ends is open to serious question. The Division has depended more upon training conferences to inform operating personnel than upon practical demonstrations and extensive applications. The applications which are made depend largely upon the willingness of the operating agencies to accept them. And there is no assurance that the areas of acceptance are the areas of greatest need; indeed, the contrary is likely to be the case.44

The Commission in 1949 recognized that much good work had been done, but suggested the following steps were desirable to stimulate management improvement:

(1) The Bureau of the Budget needed to rescue itself from an awesome quantity of budgetary detail by placing greater emphasis upon management improvement within departments.

(2) Each department should have a strong budget office and a strong program of management improvement.

41 Administrative Management in the Government of the United States, p. 18.

42 General Management of the Executive Branch (1949), pp. 25, 26.

43 Budgeting and Accounting (1949), pp. 26-28.

44 Task force report on fiscal, budgeting and accounting activities (1949), p. 52.

(3) The Administrative Management Division should be the nucleus of the President's staff work for the improvement of organization and management.

(4) The Administrative Management Division should be expanded and strengthened.45

The above recommendations have but in part been carried through. It is true that agency budget offices and management improvement programs have been strengthened. However, the core of the proposals remain unrealized. The Bureau of the Budget remains bogged down with estimates work. The Administrative Management Division has undergone a reorganization, but harldy expanded and stregnthened. It has been pointed out that its peak strength has dropped from 60 in 1945 to 16 in 1952.

WHAT MUST BE DONE

It is the unqualified opinion of the subcommittee that efficient management begins at the top of any structure be it governmental, industrial, religious, educational, or social. This is particularly true in organizations of magnitude where optimum service depends upon the decentralization of authority to the lowest practicable operating echelon. The need for strong central management control increases in direct proportion to the enlargement of the activity. Maximum decentralization of responsibility and authority does not relieve the central body of its responsibility for effective management. Decentralization expedites program implementation. It should not shift the responsibility for program planning (policy making) or program evaluation from the central body to the lower units. Decentralization actually multiplies the problems of a central group in these latter two areas of management responsibility. If the central body surrenders its prerogatives in the matters of program planning and program evaluation, the lower echelons are forced to assume complete management responsibility in these areas as well as in the area of program implementation. If this happens, because of the lack of central direction, programs become fragmented, inconsistent, ineffective, and costly. Naturally, these undesirable conditions multiply in proportion to their distance from a central point of control. Our study has shown these are largely the conditions existent in the administrative management practices of the executive branch today.

FIRST CORRECTIVE STEP

The first corrective step should be the creation of a strong central point of control for the administrative management responsibilities of the Chief Executive.

The President is in great need of assistance in discharging his administrative management responsibilities. He is currently unable to devote more than a small fraction of his attention to his administrative management arms.

Much has been written in the past about the need for the President to inject himself more into the intimate operations of the Government's personnel program. It was strongly urged by the Commission on Organization of the Executive Branch of the Government that an

45 Budgeting and Accounting, pp. 27-28.

Office of Personnel be created in the Executive Office of the President in order to facilitate his attention to the Government's personnel program. It is acknowledged that the Commission's recommendation contemplated much greater administrative responsibilities in such an office than currently attached to the Civil Service Commission. In this latter respect, we agree. However, at present, the Civil Service Commission's responsibility for central leadership and direction in Federal personnel matters is preponderant in the administrative management of the Government. Also, as head of the Civil Service Commission, the chairman has direct administrative relationship with the President. Therefore, it seems logical to conclude that, if the President is not capable of devoting more attention to the personnel operation than currently possible, the mere creation of the office proposed by the Commission will not solve the problem of needed coordination with the other members of the President's administrative family.

While much less has been said and written about the General Services Administration insofar as its relationship with the President and the other administrative management arms is concerned, as is pointed out in this report, it is illogical to regard that arm as of lesser importance than the Civil Service Commission or the Budget Bureau in the matter of overall management. At present, the liaison between the Chief Executive and the Administrator of General Services is no better than the liaison between the President and the Chairman of the Civil Service Commission. The President's attention can be nothing more than minimal.

The subcommittee concludes that an Office of Administrative Management should be created in the Executive Office of the President with a Director in charge. This Office should be responsible to the President for those functions currently assigned to the Bureau of the Budget, the Civil Service Commission, and the General Services Administration. It is not proposed that the President himself, as head of the executive branch, should be relieved of his responsibility or authority to direct the administrative management program. Such an interpretation is in complete disagreement with our thinking. In fact, the primary philosophy of this proposal is to strengthen the position of the President in discharging the administrative management responsibilities of his office rather than weaken his position in this regard.

The subcommittee believes the President's position will be strengthened because:

(1) The Director of the proposed Office can speak authoritatively in all areas of the administrative management program. The President will have to look to but one point for assistance in carrying out his administrative management responsibilities. He will be afforded the opportunity of having all areas of the program authoritatively represented and presented when making decisions dealing with the administrative management of the executive branch.

(2) Similarly, Cabinet officers, heads of independent offices, Members of Congress and other interested parties or bodies will have to look to but one point for information or assistance in matters of interest to them and for which the Office of Administrative Management can authoritatively speak.

(3) Departments and agencies will be enabled to effect a much greater degree of decentralization of authority in administrative management matters than currently prevails.

(4) Through adequate administrative measures the Director of the proposed office can effect the badly needed balance and coordination. in planning, executing and evaluating the several areas of the administrative management program.

In no sense should the Director of this Office be authorized to exercise directive power in his own name over Cabinet officers, their departments and bureaus, or independent agency heads and their subordinate activities. We reemphasize, such authority belongs to the President alone. However, his presence at Cabinet meetings as a consultant and adviser in administrative management matters to the President and his policymakers should be an accepted matter of sound administrative policy.

The sole authority vested in the Director of this Office concerns the administration of the administrative management program. In his capacity as chief adviser and assistant to the President, this official should be responsible for the development and guidance of the program in keeping with the President's desires. The responsibilities of the Director will be twofold. First, he will maintain such liaison with the President, Cabinet officers and heads of independent agencies as is needed to determine how best his office can serve them in administrative management matters.

This can be effected largely by the attendance of the Director at high-level conferences and meetings of the President's Cabinet and other bodies responsible for substantive policy matters.

Secondly, he will construct and direct the program in keeping with the needs of the serviced departments and agencies in carrying out their substantive missions. The initial phase of this functional responsibility will be the effective planning of the overall program in terms of how best the management of the men, money, materials, and methods throughout the Government can be accomplished from the standpoint of immediate and long-range needs. The next phase of this functional responsibility will be the execution of the program in keeping with the planned approach as determined initially. The last phase will be to establish and conduct an objective system for appraising and evaluating the effectiveness of the program in action. While all of these phases are necessary for the constitution of the whole program, the last, which at present is so badly neglected, is extremely valuable insofar as program consistency of purpose and constancy of effectiveness are concerned. It is this phase which will provide a major part of the foundation for the first and second phases. It is this phase which, through the Director, will provide the Chief Executive with a current, objective accounting as to how the President's desires in the area of overall administrative management are being met both horizontally and vertically throughout the executive branch. Mr. Lawrence A. Appley, president of the American Management Association, aptly summarized our thinking in this regard when he stated:

Remember that the lower echelons of management will do what top management inspects.46

46 Improving Management in Government, Personnel Administration (May 1951), p. 4.

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